Asian Session Forex Recap – Feb. 26, 2016

  • Japan national core CPI stagnates in January vs. 0.2% decline expected, 0.1% uptick in December
  • Tokyo’s core CPI down by 0.1% in February vs. 0.0% expected, 0.1% decline in January
  • U.K. GfK consumer confidence down to 0 vs. 3 expected, 4 previous

The dollar was the biggest loser during the Asian session, as forex traders priced in a risk-friendly trading environment and a couple of bullish reports.

Major Events:

New Zealand’s trade data – New Zealand shocked the forex bulls into action today, as its trade balance data surprised with an 8 million NZD trade surplus in January, a first in eight months. Analysts had expected a deficit of 271M NZD.

Details reveal a 5.9% increase in exports led by dairy and wood products. Meanwhile, imports also jumped by 7.2% though it was mostly offset by the decline in oil import prices. With 8 out of 10 major export categories recording higher values, the report painted a bright picture for the export-driven economy.

Japan’s inflation numbers – Three guesses on how Japan’s inflation is faring! The national core CPI came in at a big 0.0% in January after December’s 0.1% growth. Tokyo’s core CPI also disappointed with a 0.1% decline and increased speculations of further BOJ easing in the foreseeable future. Luckily for risk-friendly traders, the majority of market players chose to extend the optimism from the U.S. session and boosted the yen before a bit of profit-taking kicked in.

Profit-taking ahead of today’s events? – Whether it’s an extension of yesterday’s risk appetite or a bit of profit-taking ahead of today’s U.S. GDP report and G20 meetings in China, the low-yielding currencies seem to be taking steps back against their higher-yielding counterparts. Even commodities and equities reflected a bit of risk-taking with Nikkei up by 1.01%, Shanghai up by 0.43%, Hang Seng up by 1.63%, and Australia’s ASX only down by 0.12%. Read Forex Gump’s trading guide if you’re planning on trading today’s U.S. GDP release!

Major Currency Movers:

USD – The low-yielding Greenback got the brunt of the risk-taking vibe today. EUR/USD jumped by 19 pips (+0.17%), GBP/USD rose by 28 pips (+0.20%), and USD/CHF slipped by 12 pips (-0.12%).

JPY – The yen took a couple of hits on the back of risk appetite, but soon erased some of its losses near the end of the trading session.

USD/JPY hit a high of 113.22 before levelling off to 112.83 while EUR/JPY hit a high of 125.02 before settling to 124.79. Ditto for AUD/JPY, which jumped to 82.02 before closing at 81.69.

NZD – The Kiwi is the biggest winner of the lot, mostly thanks to New Zealand’s trade surplus surprise.

NZD/USD popped up by 47 pips (+0.70%), NZD/JPY jumped by 54 pips (+0.71%), GBP/NZD slid by 100 pips (-0.48%), and AUD/NZD dropped by 73 pips (-0.68%).

Watch Out For:

  • G20 meetings in Shanghai start today. Watch out for jawboning and other potential catalysts!
  • 7:45 am GMT: French consumer spending and preliminary CPI numbers generally expected to print better results than the previous month.
  • 8:00 am GMT: Spain’s flash CPI expected at -0.5% vs. -0.3% previous

See more:

U.S. Session Forex Recap

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